Bill Mauldin, acting on a hunch that mortgage interest rates may head up with a bounce in the stock market, called his mortgage lender two weeks ago to lock in the interest rates to refinance two mortgages. 

"It started inching up a bit. Rates may inch up even more,'' said Mauldin, a director of business development for a technology company, who had been shopping for the best rates online for several weeks before deciding to lock in his rates. 

For homeowners such as Mauldin, they likely missed out on capturing some of the lowest mortgage rates on record. Rates have been moving higher in recent weeks with an upswing in bond yields, as Wall Street and bond investors are betting that the ailing U.S. economy may be soon on the path to recovery. 

Yet, despite the uptick in rates, a record number of homeowners are projected by analysts to refinance about $1.9 trillion of mortgages this year. This refinancing wave has kept the economy from sinking further because homeowners have cut their monthly mortgage payments or tapped into the values of their homes to spend on goods and services. 

And, with rates pushing higher, some lenders estimated that they are seeing a 50 percent increase in recent weeks in homeowners calling them to lock in rates on their mortgages. 

NOT TOO LATE 

Despite missing out on the absolute lows, mortgage lenders said, homeowners looking to refinance can still achieve sizable savings with these higher rates, because rates are still near their lowest levels in three decades. 

But homeowners should act soon because mortgage rates will probably not fall much any time soon. 

``Rates, even with the instability in the bond market, are still low,'' said Joe Bryant, executive vice president in sales for American Home Mortgage in Melville, N.Y. 

Rather than hoping for rates to fall again, Patrick Lee, a 28-year-old product development consultant in New Berlin, Wis., decided to refinance his existing mortgage with Quicken Loans, his current mortgage lender. He will likely close his refinance mortgage by January and see his monthly payment fall by $156 after living in his home for just about a year. 

Lee said he hopes to put the money saved from a lower-cost mortgage into savings for himself and his wife, a full-time dental school student. ``It make sense to lower your payment. It's just to keep everything in budget,'' he said. 

Meanwhile, locking in when he did, Mauldin refinanced in two ways. 

On his family home in Florida, he wanted to speed up his repayment by switching into a 15-year loan from a 30-year loan but bumping up his monthly payment by $100. 

On his second home outside Washington, D.C., close to his employer, Mauldin refinanced with a loan that has an interest rate 1.5 point lower than the original mortgage, and cut his monthly payment by $150. 

BOND MARKET HOLDS KEY 

Bond yields have direct influence on U.S. mortgage rates because many mortgage loans are resold by lenders in the secondary market and then repackaged into bonds for investors. 

Yields on U.S. Treasuries -- benchmarks for mortgage-backed securities -- have climbed half a percentage point since early November. At the same time, rates on fixed-rate mortgages, which represent 90 percent of the $5.6 trillion worth of mortgages outstanding, have risen 0.3 percentage point. 

Interest rates on 30-year fixed-rate mortgages averaged 6.84 percent last week, more than a full percentage point lower than a year earlier, mortgage finance giant Freddie Mac said. 

On Tuesday, the Federal Reserve cut short-term interest rates for the 11th time this year. It said, in an accompanying statement with the rate cut, that the economy remained weak, but could be poised for a recovery. And Treasury yields fell in response to the Fed's view. 

``The Fed is close to being done. The economy is bottoming out,'' said Peter Struck, first vice president of capital markets at Washington Mutual Inc., the biggest U.S. savings and loan and a leading national mortgage lender. 

Lenders and analysts predicted that the moderate decline in bond yields could temporarily push mortgage rates back down a bit, but would not be enough to reverse their uptrend. 

Robert Walters, vice president of secondary marketing at Quicken Loans, a unit of Intuit Inc. in Livonia, Mich., said that rates probably hit bottom in November. 

``The good news is while you may feel slight pain that you miss the absolute lows, rates are still terrifically low,'' Walters said. 

Mauldin, too, said he believes these slightly higher rates are still bargains versus the heydays of high inflation and interest rates of the 1970s. 

``I've seen rates come and go. I remember the days when they were 14 to 18 percent,'' he said.